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It seems affordability is a key factor in the market with the lower-end being the star performer
The South African residential property market has slowed down somewhat in the last year, but there has been increased confidence in the lower-end of the market, with investors buying homes which are affordable, rather than those in the top bracket which are over-priced. “We have seen consolidation in the market and had somewhat of a soft landing in the past year, but essentially the market has been flat”, says CE of Pam Golding, Dr Andrew Golding, speaking at a media event in Cape Town on Tuesday. “Upper-top-end property sales have been good and bad — there has been a lot of foreigner spending here and we expect to see a good year ahead, but the top-middle-end has not been as vibrant, with few buyers chasing the market.”
It seems “affordability” is a key factor in the market with the “lower-end being the star performer”.
A rapidly emerging middle-market
Pam Golding Properties have 15 black-owned offices which Golding says “are rapidly making inroads into emerging markets”. The Gauteng region is also vibrant and “has also been the markets best performer”, and will remain “even keel” over the next year,” predicts Golding.
“Contrary to popular belief, the year-end holiday season is a good time to market a home in Gauteng, being a relaxed period in which 50 to 60 percent of buyers don’t head for the coast, but remain at home.”
While the Western Cape’s performance was “pleasing”, Golding says it was thanks to the “much-needed kick-start it received from foreign presence".
KwaZulu-Natal prices have also begun to rise but Golding says they are “still playing catch-up”. Inland, smaller towns where property again is affordable have seen “record totals”.
Buyers more realistic
Commenting on the market in the Western Cape, Golding says that buyers are more realistic and are taking their time to make buying decisions.
"The positive spin-off from the reduction in speculators has decreased fears of the bubble bursting scenario, and what we are seeing now are discerning buyers who are cautious of over-paying, particularly with the likelihood of further rate hikes to come.”
“Sellers being more realistic about their pricing strategies, as over-priced homes are simply not staying in the market for longer. Conversely, those that are accurately priced are not lingering on the market for more than 50 days or so.”
Golding is optimistic about inflation and thinks that it will “remain stable”, probably seeing the 2.5 percent increase which the market is expecting. He also sees continued increases in foreign direct investment, sighting the recent buyout of the V&A Waterfront as the beginning of Arab investment into the South African property market.
Golding says that Pam Golding is positive and bullish about the year ahead and reiterated that the emerging middle-class will be the driver in the residential market.
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